Defence allocation raised to Rs2.557trn
ISLAMABAD: The federal government has increased the allocation for Defence Affairs and Services to Rs2,557.95 billion for the fiscal year 2025-26, showing a 20.2 percent rise from the original budget estimate of Rs2,128.78 billion for 2024-25 and a 16.8 percent increase from the revised estimate of Rs2,189.91 billion for the same year.
This allocation represents 14.49 percent of the total budget outlay of Rs17.6573 trillion for FY2025–26, compared to 11.28 percent of the total budget outlay of Rs18.9 trillion in FY2024–25.
The hike is attributed to ongoing inflationary pressures, sustained operational readiness requirements, and a recent escalation in border tensions with India, particularly skirmishes in the Sialkot and Neelum Valley sectors this year. These developments prompted renewed attention to military preparedness and deterrence across conventional and strategic levels.
Pakistan budget 2025-26: Rs2.8 trillion defence budget proposed citing 'war-like situation' with India
The allocation for defence services-a major component within the broader Defence Affairs and Services category-has been increased to Rs2,550 billion for FY2025-26. This marks a 20.2 percent rise over the original FY2024–25 budget of Rs2,122 billion and a 16.8 percent increase over the revised estimate of Rs2,181.5 billion. Within this amount, employee-related expenses have been raised to Rs846.03 billion from the Rs826.79 billion revised figure last year-an increase of approximately 2.3 percent. Operating expenses, which include fuel, rations, and training, have jumped to Rs704.4 billion, reflecting a 28.8 percent increase from the revised Rs547.01 billion. Physical assets (mainly arms and ammunition procurement) have been allocated Rs663.07 billion, up 20.5 percent from Rs550.19 billion last year. Civil works, covering construction and infrastructure maintenance, have seen a significant rise to Rs336.49 billion, up 30.6 percent from the revised allocation of Rs257.5 billion in FY2024–25.
The budget for defence administration stands at Rs7.95 billion, a 5.5 percent decrease from the Rs8.42 billion revised estimate of the previous year.
Meanwhile, the government has allocated Rs742 billion for pensions of retired military personnel, which is not included under Defence Affairs and Services. This is a 9.7 percent increase from the revised pension estimate of Rs676.08 billion for 2024–25 and a 12.1 percent rise from the original pension budget of Rs662 billion last year.
Under the Public Sector Development Programme (PSDP), defence-related allocations have been reduced. The Defence Division has received Rs6.03 billion for 2025–26, compared to Rs6.78 billion in FY2024–25, reflecting a decrease of 11 percent.
The Defence Production Division has been allocated Rs1.79 billion, down 52.5 percent from last year's Rs3.77 billion. The Strategic Plans Division (SPD), which oversees key elements of the country's nuclear and strategic capabilities, received Rs5.42 billion, representing a 77.5 percent cut from the Rs24.1 billion allocated last year. The Space and Upper Atmosphere Research Commission (SUPARCO) has also seen its development allocation drop from Rs24.1 billion to Rs5.42 billion.
Similarly, the Pakistan Atomic Energy Commission (PAEC) saw its development allocation fall from Rs184.6 billion to Rs133.4 billion, a 27.7 percent reduction. These significant cuts suggest either budgetary tightening or reclassification of sensitive projects outside public documentation, defence analyst stated.
Other defence-related heads across the budget include Rs274.15 billion allocated to the Combined Civil Armed Forces, up 12.8 percent from Rs243.1 billion last year.
The Federal Government Educational Institutions in Cantonments and Garrisons have been granted Rs21.2 billion, while the Pakistan Maritime Security Agency (PMSA) received Rs1.27 billion.
Despite a reduction in the overall budget outlay from Rs18.9 trillion to Rs17.6 trillion, defence spending continues to expand, reflecting the government's prioritization of national security amid regional volatility. With the inclusion of pensions and PSDP allocations, total visible defence-related spending now exceeds Rs2.9 trillion, affirming the sector's central role in Pakistan's fiscal and strategic planning, defence analysts maintain.
Copyright Business Recorder, 2025
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